Ryan O’Leary, Senior Vice President of Chicago Operations, penned an article last month for REJournals. It outlined the qualities to look for in a potential developer and explained how working with a commercial real estate broker can be an indispensable guide through the process.
Before developers even get involved, O’Leary explains, a broker uses “in-depth knowledge of their industry and familiarity with all of the players” to understand your business and space needs and come up with a list of developers who might best fulfill them. The broker also serves as intermediary between your company and the developers, “helping negotiate all the terms of your transaction.”
When it comes to selecting a developer from that short list, O’Leary advises looking beyond price. “While price is important and will always matter,” he writes, your goal should be “a high-quality building that is delivered on time and budget.” To that end, he recommends considering the following factors as well:
- The Business Model – Are they looking to lease to you directly, or sell the building to a third-party investor? If they’re not going to be with you for the long haul, they might be prioritizing their own up-front gains.
- The Site – If your developer has a team on staff to handle all the angles, from planning and infrastructure to entitlement and civil engineering, it can save you time and money against one who hires all of that out to consultants.
- Expertise and Track Record – Are they up-to-date on all facets of construction and marketing requirements? Do they have the track record to back it up?
- Financial Strength – Are they strong enough to handle even unforeseen issues? Is their funding subject to capital markets? Make sure your developer is financially equipped to see the project through.
Industrial development, O’Leary says, “is an arduous undertaking,” He advises meeting all the prospects face-to-face, then making a decision based on a complete set of presentations and the counsel of your real estate broker. By making an informed decision, you’ll come as close as possible to the ideal outcome: “a high-quality facility that’s perfect for your needs.”
You can read the entire article at REJournals here.